Legal Definitions - undivided interest

An undivided interest describes a form of property ownership where two or more individuals or entities jointly own a single asset, but their ownership is not physically separated into distinct portions. Instead, each co-owner has a right to possess and use the entire property, rather than having exclusive rights to a specific section or part of it. Even if co-owners hold different percentage shares (e.g., one owns 60%, another 40%), their interest still extends across the whole property, meaning no single owner can claim exclusive rights to a particular room, section, or piece of the asset.

• Imagine three siblings, Sarah, Tom, and Emily, inherit a family vacation cabin. They hold an undivided interest in the property. This means that while each sibling might technically own one-third of the cabin, none of them exclusively owns a specific bedroom, the kitchen, or the living room. Instead, each sibling has the right to use and enjoy the entire cabin, including all its rooms and amenities. They must agree on how to manage or sell the property as a whole, because no one can sell "their" third of the kitchen separately.

• Consider two business partners, Alex and Ben, who jointly purchase a specialized piece of machinery for their manufacturing company. They own this equipment with an undivided interest. Neither Alex nor Ben can claim exclusive ownership over, say, the motor or the control panel of the machine. Both partners have full rights to operate and benefit from the entire machine for their business operations. If they decide to sell it, they sell the whole machine, not just their "half" of its components.

• Let's say a valuable antique grandfather clock is passed down to three cousins: Maria, David, and Lena. They decide to share ownership with an undivided interest. This means that while they all have a stake in the clock, Maria doesn't own the clock face, David the pendulum, and Lena the wooden casing. Instead, each cousin has an ownership right that extends to the entire clock. They collectively decide where the clock will be kept, how it will be maintained, or if it will be sold, as no one possesses exclusive rights to any single part of the heirloom.